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Week 21: 💩 Bullshit within Fintech?

This week: 🌱 Green fintech initiatives 🎮 The first bank to launch... a video game? 💩 99% bullshi

This week in fintech

May 25 · Issue #14 · View online
A weekly summary of the latest news in our world of finance, design, and technology.

This week: 🌱 Green fintech initiatives 🎮 The first bank to launch… a video game? 💩 99% bullshit within Fintech? 🎙 The strategic moment for podcasting 🍕 Pizza Arbitrage

🌱 Green fintech initiatives
The family-focused financial management app GoHenry launched a new biodegradable card for kids last week. They have also partnered with the Eden Reforestation Project to plant a tree for the first use of each new card. This is an excellent example of fintechs and banks trying to make the world greener.
Stripe is going even further by having a small team that works on creating a market for carbon removal by being an early customer of promising negative emissions technologies. They have pledged to invest 1 million USD yearly for the direct removal of carbon dioxide from the atmosphere. Last week they reported their first purchase.
It’s not always easy knowing what to support in the jungle of companies claiming to help the environment. Stripe even need an entore team dedicated to just that. So how can you, as a consumer, be sure your investments match your values? Well, there is a tool called Invest your values, that helps you check if your portfolio consists of gun or fossil fuel stocks and then enables you to place your money in more worthwhile causes. The solution just won Fast Company’s 2020 World-Changing Ideas Awards in the category of impact investing.
🎮 The first bank to launch... a video game?
In the list of things you’d never expect a bank to do, launching a video game is probably pretty close to the top. The British bank NatWest however, did precisely that last week, becoming the first bank to launch a video game for PS4, Xbox One, Nintendo Switch, and PC. It’s a first-person adventure game aimed at kids with a series of money learning points sprinkled in. It might seem a bit far fetched, but Tobias van Schneider, a designer and writer, is arguing that games now are more than just entertainment. They’re now platforms where brands need to come up with creative ideas to be part of the platform and partner with the game creators.
Speaking of games: What do you do when you are the worlds best chess-player, the world is in lock-down-mode, you want to play chess and people are starved for live sports? You could host a chess tournament where you are the number one attraction, and maybe you also win the prize money? Welcome to the new economics of chess!
💩 Bullshit within fintech?
Unfortunately, there is still 99 percent bullshit within fintech - David Baum
The quote above is from David Baum, who is resigning as CEO from Finstart Nordic, SpareBank 1 SR-Banks innovation arm (🇳🇴). He has for the last two years been talking to a lot of fintechs in the nordic region. Baum elaborates what he means by bullshit within fintech: «Those with business models that are so slim that you will never see black numbers, and where you also have entrepreneurs who do not understand that it will never happen. They think that if they generate enough attention, they will get an investment.» Maybe not that weird some founders have this notion when they see that Facebook bought Giphy for 150 Million USD last week? Their COO has earlier has gone publicly out and said that making money is something they shouldn’t yet be “spinning our wheels doing”. Being a fintech without a monetization-plan, however, seems a bit far fetched?
🎙 The strategic moment for podcasting
Not Fintech, but none the less the largest tech-news this week, is that Joe Rogan’s podcast is distributed exclusively on Spotify from September on. The deal is allegedly worth around 100-200 million USD for Rogan. Despite the massive payout the Venture Capital investor Andrew Wilkinson is arguing that Joe Rogan got ripped off. He might be on to something considering that Spotify’s market cap jumped by $3 billion in the 24h after the news of this deal broke.
The move is strategically significant for Spotify since they earn a lot more from podcasts than they do from music streaming. Even premium, paying users will hear ads in Spotify podcasts, so they double-dip with revenue in these cases. Some argue that this could be strategically good for podcasting ecosystem longterm, since it is under-monetized. Most experts agree that this deal will come to symbolize the moment when the open, RSS-based podcast ecosystem began to collapse. But there might be a way to save the free podcasting platform as we know: The other actors in podcasting need to collaborate and create new standards that make the experience better for listeners, creators, and advertisers, much like W3C governs web standards today.
Strategically this was a wise move for Spotify. Here is an interesting take on why the next step for Spotify might be acquiring Sonos. Buying Sonos would be a direct extension of the same strategy they have employed to reach the verge of dominance in podcasting. If that is correct, let’s hope for Spotify’s sake that  doesn’t have their eyes set on the same target. 👀
🍕 Pizza Arbitrage
What do you do if you own a pizza restaurant that don’t offer delivery, but suddenly DoorDash, one of the big online food-delivery companies, will deliver your pizzas without permission? What if you also notice that DoorDash will sometimes charge the user less for the pizza then they pay your restaurant?
If someone could pay Doordash $16 a pizza, and Doordash would pay his restaurant $24 a pizza, then he should clearly just order pizzas himself via Doordash, all day long. You’d net a clean $8 profit per pizza [insert nerdy economics joke about there is such a thing as a free lunch].
(For reference: Doordash lost lost 450 million USD in 2019 with about $1 billion of revenue – wonder why?)
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Marius Hauken, Partner Stacc X
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